Offshore Wind Power Examined: Effects, Benefits, and Costs of Offshore Wind Farms Along the US Atlantic and Gulf Coasts

Sally Robson, Ethan Russell and Daniel Shawhan ()
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Sally Robson: Resources for the Future
Ethan Russell: Resources for the Future

No 24-17, RFF Working Paper Series from Resources for the Future

Abstract: Electricity from offshore wind is considered important for reducing energy-related emissions because of its ability to serve coastal areas and complement other nonemitting electricity sources. However, there are open questions about the degree to which it will replace emitting versus other nonemitting generation, improve public health, and affect the total cost of the electricity supply. In the face of recent input cost increases and project cancellations, governments are deciding how strongly to support offshore wind development. To help with such decisions, we project and evaluate several effects of a set of 32 planned or proposed offshore wind farms along the Atlantic and Gulf coasts of the United States, which would produce approximately 2.5 percent of US and Canadian electricity generation. We examine how those offshore wind farms would affect other electricity generation capacity, generation, emissions, health, costs for electricity and natural gas customers, profits of the electricity and natural gas supply industries, and net government revenues, in the year 2035. We include capital expenditure recovery and financing among the costs.In our modeling results, from a detailed power sector capacity expansion and dispatch model, the offshore wind farms’ estimated net benefits are positive, with an estimated benefit-to-cost ratio of 14 to 1. Generation from the offshore wind farms disproportionately reduces natural gas and coal-fueled generation, causing large emissions reductions. Further, the emissions reductions tend to be upwind of densely populated areas. Consequently, the offshore wind farms reduce annual estimated US premature deaths from airborne particulate matter and ground-level ozone by 520 per year. Black, Hispanic, and low-income Americans account for a disproportionately large share of the premature deaths avoided, as do residents of the New York City area. The offshore wind farms reduce worldwide projected future deaths from climate change by 1,600 per year of their operation. The offshore wind farms increase the overall nonenvironmental costs of the electricity supply but reduce customer electricity and natural gas bills. Though our study is relatively comprehensive, it, like others, does not include all benefits and costs. Notably, it does not include estimates of the likely downward effect of the 32 offshore wind farms on the cost of subsequent offshore wind development or the benefits of the increased future development that is likely to result.

Date: 2024-10-02
New Economics Papers: this item is included in nep-ene, nep-env, nep-ipr and nep-ppm
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